UK sports betting firms bet on US after sports betting wager ruling
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5 June 2018
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By Natalie Sherman

Business press reporter, New york city

It's high stakes for UK firms as sports betting wagering starts to spread out in America.

From Tuesday, new rules on sports betting entered effect in Delaware, a tiny east coast state about 2 hours from Washington.

Neighbouring New Jersey might start accepting sports betting bets as early as Friday.

The changes are the very first in what might end up being a wave of legalisation after the Supreme Court last month cleared the method for states to allow sports betting.

The market sees a "when in a generation" chance to a new market in sports betting-mad America, said Dublin-based financial analyst David Jennings, who heads leisure research study at Davy.

For UK firms, which are grappling with combination, increased online competitors and tougher rules from UK regulators, the timing is particularly suitable.

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But the market says relying on the US stays a dangerous bet, as UK business face complicated state-by-state policy and competition from entrenched regional interests.

"It's something that we're actually concentrating on, but equally we don't wish to overhype it," said James Midmer, representative at Paddy Power Betfair, which just recently bought the US dream sports betting site FanDuel.

'Require time'

The US accounted for about 23% of the world's $244bn (₤ 182bn) in video gaming revenue in 2015, according to a report by Technavio, external published in January.

Firms are wanting to tap into more of that activity after last month's decision, which overruled a 1992 federal law that barred states beyond Nevada and a couple of others from authorising sports betting wagering.

The judgment found the law was an over-reach of federal power. But the court it did not actually legalise sports betting, leaving that question to regional lawmakers.
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That is expected to lead to considerable variation in how companies get certified, where sports betting wagering can take place, and which events are open to speculation - with huge ramifications for the size of the marketplace.

Potential revenue ranges from $4.2 bn to practically $20bn every year depending on elements like how lots of states transfer to legalise, Oxford Economics estimated in a 2017 research study for the American Gaming Association.

"There was a lot of 'this is going to be substantial'", stated Will Hawkley, London-based head of leisure for consultants KPMG.

Now, he stated: "I believe many people ... are taking a look at this as, 'it's a chance however it's not going to be $20bn and it's going to be state by state and it's going to take time'."

'Remains to be seen"

Chris Grove, handling director at Eilers & Krejcik Gaming, anticipates that 32 states will legalise sports betting in some form by 2023, creating a market with about $6bn in yearly revenue.

But bookmakers face a far different landscape in America than they carry out in the UK, where sports betting stores are a frequent sight.

US laws minimal gambling mainly to Native American lands and Nevada's Las Vegas strip up until relatively just recently.

In the popular creativity, sports betting has actually long been connected to a 1919 baseball World Series match-fixing scandal.

States have actually also been slow to legalise lots of forms of online sports betting, in spite of a 2011 Justice Department opinion that appeared to get rid of obstacles.

While sports betting wagering is typically seen in its own classification, "it plainly stays to be seen whether it gets the kind of momentum individuals think it will," stated Keith Miller, law teacher at Drake University and co-author of a book about sports betting regulation.
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David Carruthers is the previous chief executive of BetonSports, who was detained in the US in 2006 for running an overseas online sportsbook and served jail time.

Now a specialist, he says UK companies must approach the market thoroughly, selecting partners with caution and preventing bad moves that might result in regulator reaction.

"This is a chance for the American sports betting bettor ... I'm not sure whether it is an opportunity for business," he states. "It really is reliant on the outcome of [state] legislation and how the organization operators pursue the opportunity."

'It will be collaborations'

As legalisation starts, sports betting companies are lobbying to fend off high tax rates, along with requests by US sports betting leagues, which wish to gather a portion of earnings as an "stability charge".

International business face the included difficulty of a powerful existing gaming market, with casino operators, state-run lottery games and Native American people that are seeking to protect their grass.

Analysts say UK companies will need to strike partnerships, providing their knowledge and innovation in order to make inroads.

They point to SBTech's current statement that it is offering innovation for Kentucky Derby operator Churchill Downs as an example of the kind of deals most likely to materialise.

"It will be a win-win for everybody, however it will be partnerships and it will be driven by technology," Mr Hawkley stated.
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'It will simply depend'

Joe Asher, president at William Hill US, is clear-eyed about the realities.
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The company has actually been purchasing the US market given that 2011, when it purchased three US firms to establish a presence in Nevada.

William Hill now employs about 450 people in the US and has actually announced partnerships with gambling establishments in Iowa and New Jersey.

It works as risk supervisor for the Delaware Lottery and has actually invested millions alongside a regional developer in a New Jersey horse racing track.

Mr Asher stated William Hill has actually ended up being a family name in Nevada however that's not always the objective all over.

"We definitely plan to have a really significant brand name presence in New Jersey," he stated. "In other states, it will simply depend on regulation and potentially who our local partner is."

"The US is going to be the most significant sports betting wagering market on the planet," he added. "Obviously that's not going to take place on the first day."

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